Performance-based marketing shifts focus to social media as search grows in importance | kbnmart

Successful performance marketing strategies are shifting to social media as search efficiency declines amid rising cost-per-clicks. That’s the conclusion of Nest Commerce’s latest Read Report.

Against the backdrop of rising consumer confidence, the report reveals a 57% year-over-year increase in average ad spend on Meta platforms, up 5% from the peak season, in Q4 2023.

Overall cost per thousand impressions (CPM) is up 6% year-over-year, “due to increased competition within the platform as advertisers become more active in response to more positive expectations.”

Nest Commerce research, based on global advertising data from over 40 ecommerce brands, managing over £100m of media spend annually, highlights a strategic shift in channel mix towards paid social to drive growth across all stages of the customer journey.

“The increased use of top-tier marketing strategies on social media platforms is evidenced by a significant 4.2x year-over-year increase in awareness campaigns on Meta,” she said.

This shift is a result of factors such as higher customer acquisition costs and lower brand visibility in search results, making it imperative for brands to target new audiences and build brand preference on paid social media.

She warned that brands that focus only on the bottom of the market are expected to fall further behind in this new landscape.

While search remains an important channel, the report finds that it has become more expensive. Cost per click has increased by 49% year-over-year, putting pressure on sales strategies that are less reliant on the platform. However, the report notes that investing in full-stack sales performance across Meta alongside search can help mitigate these rising costs.

Nest Commerce’s research also highlights the growing potential of TikTok to drive sales. TikTok’s conversion rate has seen a significant 51% increase for two consecutive quarters, indicating a promising path for brands looking to leverage the platform to achieve ecommerce success.